What Is Premium Financing?

Taking Advantage Of Premium Financing To Increase Your Wealth

Do you currently have a substantial amount of capital or own a business interested in both continuing the growth of your assets while protecting it at the same time? If so, you may want to consider premium financing as a strategy to help by providing insurance coverage to your assets while helping you reach your financial goals. If you have questions regarding premium financing in San Diego, California, Windfall Insurance Services Inc. is here to help. Continue reading to learn more about how premium financing can help you achieve financial freedom.

What Is Premium Financing, And How Does It Work?

A “premium” is the amount it costs to own an insurance policy, and is separate from your deductible amount that is required when making an insurance claim. In essence, all policyholders are required to pay insurance premiums in order to buy insurance coverage. When either an individual person or a business selects premium financing, they may borrow money from a third party in the event that they need assistance affording insurance coverage costs. This financial strategy can be similar to taking out a loan in that you would work with an insurance company to help you cover the total cost that is due to the insurance company, rather than making direct payments with the insurance company. Essentially, a borrower would make their payments to the premium financing company rather than the insurance company itself. This type of financing lets a borrower/policyholder divide their payments up over a period of time, rather than paying the entire cost of the insurance premium up front, and can be used with several different insurance types, such as life insurance, business insurance, etc.

Who Benefits Most From Premium Financing?

There are several reasons a policyholder may benefit from premium financing, and be advantageous in many situations. Particularly if an individual person or a business wants to increase their overall growth value, looking to protect a valuable investment, estate planning, etc., and do not want to tap into their savings to purchase insurance premiums, premium financing divides payments up over time, and helps a policyholder avoid paying for a large sum up front. This will then free up a policyholder’s assets so they can utilize the funds for other assets. It can also help policyholders with several insurance policies consolidate their payments. It is important to note that since insurance premium financing is like a loan, and will subsequently accumulate interest which will be required to be paid back. This will increase the cost of the premium, and if interest rates rise, the price will go higher, and in these cases, premium financing may not make financial sense.

If you are interested in premium financing in San Diego, California, contact Windfall Insurance Services Inc. today for a consultation.